Even many successful real estate investors continue using a property manager they aren’t entirely happy with because they incorrectly assume it’s a difficult process to change agencies. The truth is, if you are ready to switch, it’s as simple as writing a letter.
Before you start the process of changing agencies, be sure you have expressed your dissatisfaction to your current property manager – it’s always worth making sure they have been given the chance to take your feedback on board before moving on. It’s also worthwhile making sure you have a clear understanding of what you are hoping to gain from taking your business elsewhere and ensuring the next property management company you decide to use is willing to accommodate those needs.
Once you are certain you want to switch, it’s important to find your new property management company first. Some agencies have their own processes for handling the transition from one property manager to another, so you will want to speak with them before notifying your current agency. Many even handle the entire transition for you.
Notifying your current property manager
Your first major step to change agency is to check the contract you initially signed with your property manager. Within this contract will be a specified notice period, usually 30, 60 or 90 days - the length of time your current agency needs to be told in advance of you taking your business elsewhere.
Even if you are in the middle of a lease, you can change management company provided you give the required length of notice period. There is no break fee if you stick within this timeframe.
Effectively, this time period starts ticking down after you have sent your notice – in writing. While an email is fine, it is also worth sending a letter via registered post, and keeping these details, just to make sure you have documentation clearly indicating when the notice was sent and received.
At this point, you will sign a new agreement with the next property management company. They should handle the rest of the handover process and will speak to your current agency about obtaining the files.
Your handover checklist
While you can leave it up to your new property manager to obtain records, you should not be complacent at this point in time.
Consider querying the following to ensure the handover runs smoothly.
Have the tenants been notified?
It can be a good idea to ask for a copy of your forms ahead of officially handing in your notice, just to ensure you are collecting everything as soon as possible.
Optional steps to consider
While the handover will officially be complete after this, there are some optional steps that can help make things much smoother for yourself and your tenant.
You may wish to compile and hand over any correspondence between yourself, the former agency and the tenant to your new property manager. This could include any unresolved repairs or maintenance, or concerns,that need to be followed up on.
It could also be a good time to have a new rental appraisal.
You will also want to pass on any unique instructions onto the new property management company. This could include how you like to be notified, the amount of money you have set aside for repairs, your preferred gardener and broader plans for the property if relevant.
Finally, ask your new agency about the timing of rent payments and the fees that will be payable. Every company has their own process and banking institution, so you want to be sure that your accounts smoothly transition from one set of dates to another.